Preamble

The House met at Eleven of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Port of London and Midland Railway Bill,

River Cam Conservancy Bill,

Lords Amendments considered, and agreed to.

Ayr Burgh Electricity Bill [Lords],

As amended, considered; a Clause added: Bill to be read the Third time.

Greenock Port and Harbours Order Confirmation Bill,

Read the Third time, and passed.

HONOURS LISTS.

STATEMENT BY Mr. RONALD MCNEILL.

Mr. RONALD McNEILL: I desire, with the permission of the House, to make a short statement of a personal character which I would have made yesterday had it been possible for me to be in the House. In the course of a speech which I made in the Debate on the grant of honours, I referred by name to two gentlemen recently raised to the peerage—Lord Forres and Lord Waring. Both the Noble Lords—as, of course, I knew they would have the opportunity of doing—have since then replied in another place to my observations. I have, as I was bound to do, carefully considered their statements, with a view to determining whether they imposed upon me the duty of modifying or withdrawing anything which I Bad said.
I should like, in the first place, to say quite clearly that I cannot and do not subscribe to the doctrine that a Member of this House who conceives it to be his
duty, when, as he believes, exposing abuses to mention the names of individuals outside this House, is under any obligation to waive Parliamentary privilege, and invite litigation to test the accuracy of his statements. I think it is obvious that, if it came to be regarded as an honourable obligation to take any such course, there would be at once an end of that complete freedom of criticism in Parliament which it is essential in the public interest to protect and maintain. I do not think hon. Members are more likely to favour such a doctrine when they find the head of the judiciary before whom any litigation in the last resort may come up for decision, expressing himself in terms of strong bias without more knowledge of the subject matter than could be gained from an ex parte statement of the facts. On the other hand, of course, I recognise that it would be an abuse of Parliamentary privilege if an hon. Member were to make reckless charges in this House against other people. He is bound to exercise the utmost caution, and to satisfy himself, to the best of his judgment, that any charges he may feel it his duty to make are based upon cogent and trustworthy evidence
I can assure the House that in the two cases referred to I did, to the best of my ability, use that caution, and satisfied myself, as far as it was possible to do so, that the information at my disposal was thoroughly reliable. But it is unnecessary to trouble the House with a recital of the steps I took to test it. I think I am entitled to assure the House that I acted perfectly bonà fide in the matter, that I had no sort of malice or animosity against either of the Noble Lords, one of whom I had never seen, and the other of whom had been a Member of this House for years, and with whom I never had the slightest disagreement. My speech was made on a Motion for an inquiry which, had it been accepted by the Government, would have enabled my statements to be thoroughly tested. I regret very much that the Government refused to grant such an inquiry, which I think would have been the most satisfactory course for all parties concerned. In these circumstances, I must now refer to the two cases separately, for they stand on different grounds. Lord Forres has categorically denied that he ever wrote
such a letter as I said he had sent to one of his houses in South America, and he has also assured the House of Lords that the action brought against his firm in the Chilean Courts was genuinely and bonà fide defended. I wish to say that I accept Lord Forres' statement unreservedly, and I desire to withdraw the charge which I made, and to express my sincere regret for having done him and his firm an injustice. He has also explained that, while it is true, as I stated, that his firm carried on business with the enemy during the War, this was done with the knowledge and sanction of the Government. That undoubtedly puts a very different complexion on the matter as far as Lord Forres and his firm are concerned, and any criticism as regards such conduct should have been directed against the Government of that day. On this point I also, therefore, apologise to Lord Forres for having passed strictures on the conduct of his firm, which I would not have made against them had I been aware of the action of the Government in relation to it.
The case of Lord Waring is different. Here I have nothing to withdraw and no apology to offer, except for having perhaps expressed myself less clearly than I might have done, as most of us are liable to do when speaking without notes. In reality Lord Waring himself has not controverted anything which I said but only something which I did not say. My statement was that when his business was, owing to its financial position, reconstructed in 1910 both debenture holders and shareholders lost their capital, and that subsequently during the War he made a considerable fortune for himself, and I added these words:
No part of that fortune wont to paying the shareholders or making up the deficiency for the debenture holders in the concern of which he was the head and the managing director."—[OFFICIAL REPORT, 17th July, 1922; col. 1803, Vol. 156.]
It is obvious that these words applied exclusively to the shareholders and debenture holders in the original business which went into liquidation, and not to those in the new business created by reconstruction, in which Lord Waring was not, in fact, the managing director. It is no answer to that to state, as Lord Waring does, that the shareholders in the new
company shared the fortune he made during the War. I have no doubt that is true, but I never suggested the contrary. The facts as I stated them were perfectly accurate, but I expressly admitted that the loss of capital by debenture holders and shareholders was no doubt due to misfortune or bad management, and not to anything more reprehensible. I only referred to the case at all as an example of what I called "not very successful business." I must apologise for having detained the House, and thank hon. Members for their indulgence in giving their attention to my statement.

Mr. WISE: I wish to state to the House that the hon. Baronet the Member for Partick (Sir R. Balfour) is not in his place to-day because he is ill and laid up.

SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE C.

Sir SAMUEL ROBERTS reported from the Committee of Selection; That they had discharged the following Members from Standing Committee C: Mr. Acland, Major Barnes, and Mr. Trevelyan Thomson; and had appointed in substitution: Mr. Foot, Mr. Hay ward, and Mr. Holmes.

Sir SAMUEL ROBERTS further reported from the Committee; That they had discharged the following Member from Standing Committee C: Mr. Perkins.

STANDING COMMITTEE D.

Sir SAMUEL ROBERTS further reported from the Committee; That they had discharged the following Members from Standing Committee D: Mr. Rawlinson and Mr. Robinson; and had appointed in substitution: Lieut.-Colonel Sir Henry Grayson and Mr. Herbert Lewis.

Reports to lie upon the Table.

EXPIRING LAWS CONTINUANCE ACT.

Report from the Select Committee, with Minutes of Evidence and an Appendix, brought up, and read.

Report to lie upon the Table, and to be printed. [No. 152.]

Orders of the Day — ISLE OF MAN (CUSTOMS) BILL.

Read the Third Time, and passed.

Orders of the Day — ALLOTMENTS (SCOTLAND) BILL [Lords.]

Read a Second Time, and committed to a Standing Committee.

WAR SERVICES CANTEENS (DISPOSAL OF SURPLUS) BILL.

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a Second time."

Lieut.-Colonel NALL: I do not know whether any Member of the Government is going to move the Second Reading of this Bill. If so, I am ready to give way. I wish to say that I am unable to appreciate the point of view adopted by the War Office in presenting this Bill to the House. My hon. and gallant Friend the Financial Secretary to the War Office, not very many days ago, in answer to a question which I put across the Floor of the House, said that the Navy, Army and Air Force Institutes were not under the control of Parliament and that no Minister in this House was responsible for the conduct of that body. I hope when the hon. and gallant Gentleman comes to address the House in connection with this Bill that he will be able to clear up the constitutional question involved in this matter.
The House will forgive me for speaking without my notes at the moment, but I am sure hon. Members did not expect this Bill to be taken quite so soon. Therefore it will suffice for me to say that it does seem a gross breach of faith that the balances due to these men who contributed to the profits of the Expeditionary Force Canteens made during the War should now be applied to the liquidation of debts created by what is, as a matter of fact, an entirely different trading organisation in which the men who created the balance are in no way con-
cerned with the loss of the subsequent organisation. It seems to me that in adopting the course embodied in this Bill a gross breach of faith is being committed.
I hope that the Government will be able to assent to a Parliamentary inquiry, either by a Select Committee or in some other way, into the charges that are made in connection with the conduct of the Canteen Funds. Feeling outside this House, so far as I am in touch with it, is extraordinarily indignant that this Bill should have been introduced. It amounts, in the minds of the men concerned, to nothing short of an attempt to defraud the ex-service men and the widows and dependants of men fallen in the War of certain funds, which, by all moral rights as well, so far as I can understand, as all legal rights, are really due to them. As the Financial Secretary to the War Office is in his place and will, no doubt, desire to explain, from the War Office point of view, the reasons for this Bill, I will not stand between him and the House, although probably I shall regret having exhausted my right to speak in this Debate. I will at least ask those questions which, for my part, I want to put specifically to him. Why, if the Canteen Board are not subject to Parliament and if, as he told me the other day, no Minister in this House is answerable for the conduct of the Institute Board, is the War Office Department producing this Bill, and why does it fall to the representatives of the War Office to come to this House and ask for authority to deal with the funds of a body which has nothing whatever to do with any Member of the Government?

The FINANCIAL SECRETARY to the WAR OFFICE (Lieut.-Colonel Stanley): I must apologise for not being in my place at the moment when this Bill was called, but I had gone to fetch my papers, and, unfortunately, before I returned, the hon. and gallant Gentleman had commenced his speech. He has made some rather strong charges, which I hope that I may be able to show to the House are in no ways justified. He said that this is an attempt to defraud. That is a very strong thing to say, and I do not think, when he has heard what I have to say, that he will persist in that statement. He also asked why there was the necessity for introducing this Bill at all. The
necessity for introducing it arises from two causes. The first reason is to legalise payments which have already been made to the troops and to others, and the second reason is to enable us to pay out certain sums which will complete the operations of the Expeditionary Force Canteens and the Navy and Army Canteen Board. The payments which have already been made, and which now date back some years, were made in good faith and with no idea at that time that they were technically, and only technically, public money, and that, therefore, a covering Bill was necessary to enable them to be made. It is obvious that it is extremely desirable that the further sums which are due to the United Services Fund and to our Dominions should be paid out as soon as possible.
There has been some misconception about the two bodies which operated for the benefit of the troops during the War. To put it briefly, the Expeditionary Force Canteens operated in the theatres of war, and the Navy and Army Canteen Board operated at home and in permanent stations abroad. There has been considerable misapprehension as to the constitution of the two bodies. In one paper, which in every way possible has endeavoured to cry down the Navy and Army Canteen Board, it is referred to as a War Office concern, and that same paper says that the Expeditionary Force Canteens was a concern under civilian management with official supervision. I presume that is really a hint to show that, being under civilian management, it was efficient, while the other, being what was called a War Office concern, was inefficient. I take it that is the argument that is implied. As a matter of fact, both were under precisely the same conditions. Both were on exactly the same footing. They were both under civilian management and official supervision. Both did most admirable work, and both handed over very large sums for the benefit of the Services. These hints as to the inefficiency of the Navy and Army Canteen Board are, I think, clearly disproved when it is realised that rebates to the extent of rather over £6,500,000 were returned direct to the troops during the War, and that a further sum of nearly £2,000,000 was paid into a separate fund called the Central Regimental Institutes Fund and disbursed therefrom, partly for the benefit of the troops at the time and
partly handed over to the United Services Fund. In addition, they did considerable work in the way of feeding the troops during demobilisation without, so far as I know, a single complaint from the men, and I do not think it is fair to hint at inefficiency, to say the least of it, on the part of those who gave much time and trouble to secure the comfort of the troops.
It is freely contended—and I think my hon. and gallant Friend who spoke just now agrees—that these two organisations in the final distribution should be kept entirely apart. I can see no reason whatever for that course being taken. Both of them catered for the needs of the troops. The results of the trading were, or are to be expended for the benefit of the Services and the ex-service men and their dependants, and I think it is perfectly fair that the results should be placed together and distributed as from one fund. There are, of course, a large number of figures, and in order to facilitate the understanding of the Reports a statement has been issued by Sir William Plender and attached to the White Paper. No one will question such a distinguished authority on such matters, and our thanks are due to him for what he has done in setting forth clearly the different questions that are involved in the two Reports. Sir William Plender, on page 7 of his Report, mentions a loss of £2,500,000 in liquidation. It is really in that connection that the greatest amount of criticism has been directed against the Navy and Army Canteen Board. A loss was anticipated. That is perfectly clearly shown by the agreement that was come to between the Expeditionary Force Canteens and the Navy and Army Canteen Board when it took over, and by which it was arranged that some reserve should be made by the Expeditionary Force Canteens in its final balance sheet for the possible relief of the Navy and Army Canteen Board, who undertook to wind up the organisation, should such winding up produce a loss for the period during which the Navy and Army Canteen Board were in control.
It was perfectly evident at the time the Expeditionary Force Canteens went into liquidation and the Navy and Army Canteen Board took over the liquidation of all the stocks that a loss was expected. Of course, hon. Members may contend that the Expeditionary Force Canteens
management should have been continued, but that was looked upon as a wartime organisation. At that time the Navy and Army Canteen Board was expected to be a permanent institution. If the Expeditionary Force Canteens had been wound up and had made a clean cut at the time they ceased operations, some people suggest there would not have been any liquidation, and that the immense stocks would have just disappeared. Surely in that case there would have been a much greater loss, because there would have been none of the money which has been realised by the sale of the stocks. The liquidation had to be faced, and, as I have said, the Navy and Army Canteen Board took it on. I would really ask hon. Members to consider whether in the case of a liquidation like that, with immense stocks all over the world, there was not bound to be a loss, seeing that the stocks had to be realised on falling markets. I do not think that anyone who looks at the matter impartially can agree that at that time they should have made a practically clean cut, and that the Expeditionary Force Canteens should have nothing more to do with the money, but that it should be handed over at once to the United Services Fund, so that if there proved to be any losses on liquidation, some other body would have to bear them. There is another aspect of the case to which I would like to draw attention. Were the troops who were in the theatres of war to have no canteen facilities? Were they to be left in a state of considerable discomfort? The question of the supply of canteens to these troops added enormously to the difficulties of the Navy and Army Canteen Board. There were also difficulties in connection with the change in the system of demobilisation. The result in many cases was that canteens had still to be carried on for small parties of men, and obviously losses were inevitable. I think it is only fair, as these bodies were operating for the benefit of the troops, that the loss on the liquidation should be set against the profits or surplus of the two organisations. The War Office did not come to this decision without being reinforced by a very strong Parliamentary Committee, presided over by the hon. Member for Ecclesall (Sir S. Roberts). They made it perfectly clear that they
considered the Expeditionary Force Canteens should bear the loss on liquidation. Allowing however that the losses on liquidation should be borne by the Navy and Army Canteen Board, are we not entitled to set against those losses the profits that they had made in previous years? They paid out, as I have already stated, rather more than £6,500,000 in rebates to the troops, while practically £2,000,000 was handed over to a central fund—the United Services Fund—for the benefit of the troops. If you say they are to bear the losses surely you are entitled to set against those losses the profits. Are you to go to the United Services Fund and say, "We paid you over from the Navy and Army Canteen Board a sum of £874,000, now you must give it back to us and it will be paid to you as from the Expeditionary Force Canteens instead of the Navy and Army Canteen Board?" It seems a right thing to say that two organisations working independently for the same cause should for the purposes of distribution be called one, and that the surpluses after the liquidation should be combined and distributed as set out in the Schedules of this Bill. I ask the House to give a Second Reading to this Measure to legalise the payments that have been made and to enable us to make the final distribution.

Viscount WOLMER: There is an Amendment standing in my name and in that of the hon. Member for Central Hull (Lieut.-Commander Kenworthy) asking the House to decline to give a Second Reading to this Bill until a Select Committee has inquired into the circumstances under which the liabilities and assets of the Expeditionary Force Canteens were taken over by the Navy and Army Canteen Board and into the conduct, administration, trading accounts and balance sheet of the Navy and Army Canteen Board. It has been intimated to me that the Government will be willing to give a day in the Autumn Session for the discussion of a Motion of that character.

Lieut.-Colonel STANLEY: A half-day.

Viscount WOLMER: A half-day, and on the understanding that the Government are prepared to give us up till 8.15 on one day in the Autumn Session for the discussion of a Motion to appoint a Select Committee to inquire into these
accounts. I do not propose to move the Amendment which stands in my name. But I should like to say a few words about this Bill. My hon. and gallant Friend who moved the Second Reading has said very little about it. It is a most remarkable Bill and I should like to draw the attention of the House to the wording of it. The whole burden of the Bill is contained in Sub-section (1) of Clause 1, which reads as follows:
The sums mentioned in Part I of the Schedule to this Act shall be deemed to have been lawfully distributed and disposed of.
I venture to say that that is a somewhat dangerous method of legislation when you are dealing with highly complicated and contentious accounts. I think it is a Clause which would be very useful to some gentlemen in business sometimes. It might have been very useful to the Member for South Hackney (Mr. Bottomley). I want the House to realise when they are passing this Bill that they are saying that this money has been properly disposed of. I do not agree that the money has been properly disposed of by any means, but as we are to have a day to discuss that in the autumn I will not now go into the details of the subject. My hon. and gallant Friend has drawn a distinction between the Expeditionary Force Canteens and the Navy and Army Canteen Board, and he has said, pointing to page 4 of the accounts, that the Navy and Army Canteen Board succeeded in distributing rebates to the tune of £6,500,000 to the troops during the War, and at the end of May, 1919, had made a profit of nearly £2,000,000; and that that must be set off against the losses which they subsequently made. That is not the point at all. It is not a question of distinction between the Expeditionary Force Canteens and the Navy and Army Canteen Board; those are only two names for very similar organisations. The whole distinction is between an official canteen system during the War and during peace time.
Critics of the Government in this matter are quite prepared to admit that during the War it was wise and right to have something like the Expeditionary Force Canteens or the Navy and Army Canteen Board to supply our troops with necessaries and luxuries at the Front and at many temporary camps in England, where the ordinary trade facilities did not
exist, where, if these organisations had not been set up, nothing would have been provided for the troops, and where the canteens were operating in circumstances in which it was practically impossible to make a loss. In those conditions, that was a work which we believe could rightly be undertaken by the Government, and in that respect there was no difference between the Navy and Army Canteen Board and the Expeditionary Force Canteens; the Expeditionary Force Canteens carried on abroad, and the Navy and Army Canteen Board carried on in England. The whole burden of our charge is this, that after the Armistice, when demobilisation was taking place, the Government, instead of winding up this War canteen organisation, continued it on a peace footing under the name of the Navy and Army Canteen Board.
These accounts show that during the War these organisations made a profit of at least £12,000,000—I think it was more; but, during the period between the 1st May, 1919, and the 31st December, 1920, this State canteen system succeeded in losing £2,500,000. That money is money which comes out of the pockets of the ex-service men, because, if it had not been lost, it would have been distributed among the ex-service men. If the Government had liquidated at the date of this first balance-sheet, in May, 1919, when prices were at their zenith, when there was a great demand throughout the world for practically all the commodities with which the Expeditionary Force Canteens and the Navy and Army Canteen Board were dealing, this money would have been available for the ex-service men. Instead of that, the Government have chosen to continue a State trading establishment in every garrison town in this country and in the British Empire, and in so doing they have already, by their own admission and confession, lost a sum of £2,500,000. This loss is really to be paid for, not by the taxpayer, but by the ex-service men. That is what we mean when we speak of the matter as a scandal.
In my humble opinion, however, £2,500,000 is not by any means the total sum that has been taken from the pockets of the ex-service men in this matter. I would just mention one or two items, such as the following. The total provision in these accounts for pensions and superannuation of officials of the Navy and
Army Canteen Board and the Expeditionary Force Canteens, is no less a sum than £318,000. In addition to that, there are huge writing-offs of stock, which come to well over £500,000, and there is also a loss on funding loan of £100,000. Taking these and other items, I do not think it is beyond the mark to say that, owing to the conduct by the Government of this matter, the ex-service men are poorer by £4,000,000 than they otherwise would be. These accounts, however, are very complicated and very long. We know that they have taken two years to prepare. We have been asking for them for two years, and my right hon. Friend was only able to get them out last Monday. Therefore, it has been impossible to analyse them as fully, in the few days that have intervened since then, as we should have liked to be able to do, and, as the Government are going to give us half a day to discuss the matter in the autumn, I do not propose now to go into the details.

Sir FREDERICK BANBURY: If the Government are going to give half a day in the autumn, is the Bill to be passed in the meantime?

Viscount WOLMER: I think the situation is this: The Bill merely proposes to hand over the remaining funds to the ex-service men, and it is quite right that whatever be left should be handed over to them. None of us, I think, wishes to deprive the ex-service men of any money in this matter. Our grievance against the Government is not that they are handing over what remains to the ex-service men, but that there is so little that remains—that the amount is short by several millions. Therefore, we do not wish to delay the passage of the Bill, because the effect of the Bill is simply to hand over to the ex-service men what remains. But we do say that the accounts which have just been published should be far more fully inquired into, and, therefore, we could not allow the Bill to pass without a protest if the Government had not given an undertaking that the question of these accounts should be fully discussed in the autumn. On that undertaking, I propose to withdraw my opposition to the Bill, and I hope that my hon. Friends will do the same, because, if we persisted in our opposition, we should only be hindering the transfer of the remainder of this money to the ex-service
men, and should not be gaining any advantage, as the Government have already undertaken that the question of the accounts shall be fully discussed in the autumn. That is the situation. Our complaint lies not so much in the Bill as in the accounts, and it is the accounts that require to be ventilated. Therefore, I shall move in the autumn for the appointment of a Select Committee to inquire into the accounts, and if the Government are so confident that they are all right I hope they will not object to that Motion.

Sir F. BANBURY: I understand that Sub-section (1) of Clause 1 legalises these accounts, and, therefore, even if it be found that there is anything wrong with them, what can be done?

Viscount WOLMER: It is perfectly true that this Bill does cover the Government with a coat of whitewash. To that extent it whitewashes the conduct of the Government in this respect. But if that were not carried I suppose my right hon. Friend the Secretary of State or someone else would be put in prison, because, if you are legislating that the sums shall be deemed to have been lawfully distributed and disposed of, the supposition is that they have been illegally distributed and disposed of, and if they have been illegally distributed and disposed of, then someone ought to go to prison. I do not know if the right hon. Baronet the Member for the City of London (Sir F. Banbury) desires that the Secretary of State for War should go to prison, but I do not carry my opposition quite to that extent.

Sir DONALD MACLEAN: I should like to deal first with the point which has just been mentioned as to the exact effect, as far as we can disentangle it, of Clause 1, which is the operative Clause of the Bill. It says:
The sums mentioned in Part I of the Schedule to this Act shall be deemed to have been lawfully distributed and disposed of.
What are those sums?
Payments as rebate to units of His Majesty's forces and to forces of the United States of America, £6,500,000.
That, I take it, has gone direct to the units for the benefit of those forces. I do not see that there is any particular whitewash about that. It seems to me to be
a proper payment to make. Then there are:
Payments through the Central Regimental Institutes Fund,
which are brought out in the total lower down the page—
Expended for the benefit of His Majesty's Military and Air Forces, £166,000. Transferred to the United Services Fund, £874,500.
There can be no objection to that, presumably.
Grants paid through the Navy and Army Canteen Board for the benefit of Bis Majesty's Military and Air Forces.
I assume that these have been properly made and that they have benefited by these payments. There can be no need to whitewash that. Then there are smaller payments, totalling £77,471, and, again—
Grants from the Expeditionary Force Canteens for the benefit of His Majesty's Military and Air Forces.
Next come:
Payments for the benefit of His Majesty's Dominions and Indian Forces from the Navy and Army Canteen Board, £134,750.
There is a payment for the benefit of the Expeditionary Force Canteens. That makes a total of £729,816. Then the lump payment to the United Services Fund, making a total of £5,528,600. I am quite certain what the House wants to be assured of is that in authorising these payments under the Schedule of this Bill it is not administering any whitewash on the transactions which are complained of and which are to be inquired into, and I am assuming that in the passage of the Second Reading it is not passing a sponge over anything which ought to be inquired into on the Motion which is promised for the autumn.
We want to be perfectly clear about that, for this reason. Rightly or wrongly, there is a very large amount of suspicion and unrest with regard to what has happened in respect of this fund. Take what is occurring weekly and has occurred almost daily in the Press. There is not the slightest use closing our eyes to the fact that this matter is taken very seriously, and any attempt on the part of the Government, backed up by the House of Commons, to evade examination into that issue is of no use at all. Where it is wrong, let us have it out. Where it is right, let us do justice to those who have been wrongly treated. I will not believe
that right hon. and gallant Gentlemen in front of me will allow themselves under any conditions to be a party to evading the examination of things which ought to be cleared up. The point has been perfectly clearly stated, that there was a surplus of £10,000,000 which is now cut down to £7,000,000. There are, therefore, £3,000,000 that ought to be accounted for. I am certain some part of that sum can be accounted for. But there is a very considerable amount—I should say, making a shot at it, round about £2,000,000— the disappearance of which should be the subject of a close and public inquiry. Let us know where the loss has taken place and pin on whomever we can the responsibility for it. In a great war there is great muddle. You cannot help it. Under those conditions you always find men who are willing and very able and who devote their desires and their abilities to filling their pockets at the public expense. We want to know to what extent that has happened here. It is no good passing over cases and saying, "That is passed." It is not good for the public Departments or for public confidence in Governments that these things should not be examined. The War Office have very rightly fortified themselves with a Report from Sir William Plender, and no one stands as high, certainly no one stands higher, in the public estimation. It is a very cautious Report. He does not endeavour to conceal anything, but makes statements which are well within his competence to make and no more. He puts the thing much more clearly than I can and, therefore, I will direct attention to one or two paragraphs. He sets out very clearly, right away, the case which has been made for the disappearance of this large sum:
The change in the policy of the Government in regard to the method and pace of demobilisation.
Certainly we must make allowance for that. That means money lost. Then:
The abnormal market conditions obtaining subsequent to the date of the transfer.
That can be taken both ways. There were abnormal prices to be obtained. Again:
A shortage in the actual stocks transferred as compared with the quantities shown by the records and charged to the Navy and Army Canteen Board.
That, of course, is where the difficulty lies, and they say:
We do not know what has happened to it, but that is the reason for the shortage in what has come to us.
Sir William goes on to say:
On the other hand, I am informed that it is maintained by the Expeditionary Force Canteens officials that the conditions ruling at and subsequent to the date of the transfer (1st May, 1919) and the time which was allowed to the Navy and Army Canteen Board to reject stocks, should have enabled the Board to have earned sufficient profits on trading in the areas concerned to cover losses on liquidation.
That sounds quite sensible, and I am sure it is right—
I have not attempted—it would not have been possible within the time at my disposal —to enter into the merits or demerits of the contending views. The fact has to be faced that a large lass has been incurred since the Navy and Army Canteen Board took over the conduct of the Oversea business previously carried on by the Expeditionary Force Canteens. It could, I think, partly be expected that the business would eventually be liquidated without some loss being sustained.
It is quite obvious. We are making all allowance for that. Then he goes on with his well-balanced and reasoned statement. But quite apart from anything which has appeared in the Press, and from any questions which have been asked in this House, that Report itself makes a case for inquiry. The case for an inquiry seems to be buttressed up by every action of the Government themselves. There is nothing clearer, from what takes place from time to time in this House, than that it is the very worst thing to enter into an inquiry across the Floor of the House in regard to matters where details of this sort are concerned. This is the place for making general statements with regard to complaints, and hearing a defence on broad, general lines in reply. Once you get into examination of detail, you get lost in the fog of the details, and it is extraordinarily difficult for private Members, battling, as they are, with a Government who have immense resources of information behind them on almost every conceivable point. The only way is to refer a matter of this kind to a Committee, and to a Committee of this House. It is primarily the responsibility of Parliament. It is no use pushing it off on to a Departmental in-
quiry. Here is an inquiry, if ever there was one, for the House of Commons to take up: In the constituencies, and in this House, before and after the last election, all sorts of pledges to ex-service men were made, and this is a case where the ex-service men are peculiarly interested.
If we have the promised Debate in the autumn I hope the Government will not then refuse the inquiry. They must know that a Debate held in the autumn, which simply results in a general statement and reply to charges made here, however successful the reply may be, will not satisfy the public anxiety in regard to this matter. Full allowance must be made and will be made for the conditions under which these transactions took place, but if the Second Reading is to go through on the understanding that in the autumn, between 4 o'clock and 8.15, or round about that time, the whole case is to be settled on that basis, I am not satisfied. I want something more definite than that. I ask my right hon. Friend that that discussion shall be approached by himself and his Department with a perfectly open mind, and that they will not close their minds beforehand to the question as to whether they will or will not grant an inquiry. If that is the case, I am certain that there will be a further and most damaging lack of confidence in Governmental methods. I am not making any particular charge. I make the point which everybody will make, that it is of the utmost importance that we should add to the confidence, or restore some of the lack of confidence, with which Government Departments are looked at in the country to-day. It is a result of the War. In peace it is the duty of this House specially to see that the ordinary standards of confidence which existed before the War began are restored to all our public Departments. My right hon. Friend the Secretary of State for War, and my hon. and gallant Friend the Financial Secretary, will be well advised to see that when the Debate comes on they approach it with minds quite open, and that it will not be a question of having a mechanical majority, but that they will allow the House a full and free opportunity of expressing its views on the Motion which will then come before it.

12 N.

Lieut.-Colonel SPENDER-CLAY: I had not the advantage of hearing the opening part of the Financial Secretary's speech, but I think there are certain aspects which have not been touched upon. In the first place, I am sure that anybody in the House will consider that the reading of the Actuary's report, or of the allegations in the Press, is exactly the sort of thing which creates a feeling of suspicion in the minds of people who are susceptible to suspicion, and I am afraid that it may create a feeling of great unrest in the country among ex-service men. Therefore, we need some further assurance from those who are speaking for the Government on this matter. I quite agree that it may be advisable to have a discussion in this House in the autumn; but I recognise that we cannot go into details here. We are an unsuitable body for discussing intricate figures We ought, however, to have it perfectly clear in our minds that the Government or those who are responsible for these matters have done all in their power to bring home the guilt to those who have been guilty. Reckless statements are made in the Press, and outside, and I want to know whether these journals and these people who are interested in the subject and who make these allegations have given any proof to the Government that they could take to the Public Prosecutor and ask him to state a case on it. We ought to have that cleared up now. It is no use putting that off until the autumn. Have the Government had any proof whatever that some crime has been committed or, to take the case that was quoted in a weekly journal the other day, that three accountants were sent home from Mesopotamia? That is a case that could be proved to the bottom, and in regard to which the papers could be put in the hands of the Public Prosecutor. It is disastrous that public journals and public men should go about making reckless accusations, causing suspicion amongst ex-service men, if it is in their power to give proof to those in authority so that an investigation can be made.
Unless there be proof available, as to which all the papers can be given to the Committee set up in the autumn, I think the sooner the money is distributed the better, and that to re-open the case would be costly and futile. But, considering the matter in its broader aspects, I think
that these institutions, the Navy and Army Canteen Board and the Expeditionary Force Canteens, have some right to be proud of the work which they have done. I do not know what we should have done without them. I remember in the winter of 1914–15, when troops were dependent entirely upon gifts, and mountains of useless stuff were sent out and heaped on units that could not use them. For instance, there were vast quantities of woollen articles that were wasted, while the luxuries which the men desired were impossible to obtain. But having a canteen in these circumstances did make it easy for fraud to happen. Almost anybody of fraudulent intent could rob to some small or large extent. Nothing was so easy as to have stores destroyed by enemy action, nothing was easier than to say that stores were lost in transit on the road, and therefore fraud could easily take place. But, speaking generally, I think that the record of these two bodies was a clean one, and that they did lasting service.
I remember starting in 1915 a canteen by lending £25. In a few weeks we were dealing in hundreds and in a few months we were dealing in thousands of pounds. I viewed the position with considerable alarm because by casualties or by transfer people connected with these accounts might have been left in the division, and always there was the possibility of some dishonest person being able to help himself. I cannot help thinking that a great deal of the objection to these canteens and to this Bill is prompted by those who wish to do an injury to the Navy, Army and Air Force Institutes, and the movement leaves me cold. If you admit the advantage in certain circumstances of the co-operative movement why should you not allow the soldier to get the benefits of the profits that are made out of his own purchases? Does the Noble Lord want to go back to the old system, which existed when I was in the Army, when everything was put out to contract? His constituents probably know-more about it than he does. Whenever a regiment moved from one barrack to another there was a crowd of gentlemen waiting outside the barrack gates to meet the incoming regiment, trying to get contracts for the canteen, and there was always the suspicion that commissions were paid to non-commissioned
officers in charge of canteens. There is not a soldier, or an hon. Member uninfluenced by some of his constituents, who would wish to go back to the old contract system instead of having the advantage of the present institutes, which are of lasting benefit to the men by giving them what really amounts to a club. What would have happened in Ireland during the recent trouble I cannot imagine had not the institutes been there, available as clubs for the soldiers.
I agree that there are aspects in connection with this liquidation which are not agreeable, but I do strongly deplore the reckless statements which are made without proof. When you have a margin of possible error, as the Noble Lord admitted, of between £2,000,000 and £4,000,000-—he said he did not know whether it was £2,000,000 or £4,000,000—it shows how reckless those statements are, and they create a feeling of suspicion and distrust. I do not accuse the Noble Lord of intentionally making reckless statements, but it might be considered that such statements, coming from him, are likely to create a great deal of suspicion among those people who are having a very bad time at the present moment, and feel that some of this money, between £2,000,000 and £4,000,000, might make all the difference to the ex-soldier. I hope that if an inquiry is going to be made it will be made expeditiously, but I appeal to those in authority in the War Office to institute prosecutions at the earliest possible moment if fraud can be proved, so that those who are guilty may be punished.

Sir F. BANBURY: The hon. and gallant Member said that the Noble Lord made reckless statements. May I point out that the Bill confirms the statement made by the Noble Lord—that, somewhere or other, there has been a fraud.

Lieut.-Colonel SPENDER-CLAY: What I want is to get prosecution in such cases as those where fraud can be proved, so that there may be punishment.

Viscount WOLMER: I have not accused anybody of fraud. I only accused this body of mis-management. I do not know anything about fraud.

Sir F. BANBURY: When I used the word "fraud" I was told that it was
incorrect. But look at the Bill itself. It consists practically of one Clause with two Sub-sections. The first Sub-section says:
The sums mentioned in Part I of the Schedule to this Act shall be deemed to have been lawfully distributed and disposed of.
If all these funds have been lawfully disposed of, and there has been no fraud, this Clause is out of order because it is superfluous. If there has been no fraud, and no money has been spent illegally, we do not want to put in a Bill a Sub-section to provide that the money spent has been spent legally, and, on the other hand, we do not want to provide that the person doing an illegal act shall be whitewashed. I have always been brought up to understand that when an Amendment is superfluous, it is not put into a Bill, and I suppose the same rule applies to a Clause. It is evident that someone somehow has done something which necessitates this Clause. Quod erat demonstrandum, as Euclid says. I hope the Government will do what the right hon. Member for Peebles (Sir D. Maclean) has suggested, namely, appoint a Committee. I think that the arrangement suggested by the Noble Lord, that there should be a discussion for a short time, is a good one, as such discussion will show the lines which are taken by those people who think there is something which is being hidden. If, after that discussion, a Committee is appointed, the requirements of justice will be met. But it is absolutely necessary to have an inquiry in order that we may be satisfied that what has been illegally done has really not been a question of fraud, but that some error has been committed which is not strictly legal.

Mr. WISE: In reply to the right hon. Baronet the Member for the City of London, I think this Clause is put in because the United Services Fund has already received a large portion of the money which is due to it. In 1919, when that gallant soldier, Lord Byng, organised the United Services Fund, one of the conditions he laid down was that there should not be any Parliamentary control. I have acted in a voluntary capacity for Lord Byng, as financial adviser, and I have been connected with the United Services Fund almost since its inception. In fact in the old days I wrote up the ledgers, and to-day I sit on an advisory financial committee. I have been fighting
for the ex-service man ever since to get as much money as possible on account of his fund. I believe that the amount of £7,200,000 is a fair amount and that the ex-service man is satisfied with it. The memorandum in the Bill more or less gives the details. You must realise that during the War it was necessary to set up a certain temporary organisation to cater for the needs of the men from overseas and at home. The main point after the War—in fact it was made during the War—was that the canteen profits were promised to the men and to the dependants of those who died in service.
Look at this as a trading proposition. I cannot help thinking that any trading proposition such as this large organisation was bound to make losses in one of the three years that have passed since the War. During the War we had control more or less. After the War there was a short boom. Then there came a slump, as quick as to many it was unexpected. Any business of this capacity with a continuous life was bound, when the slump came, to find itself burdened with a great amount of stock, especially a company of this sort which carried on a huge feeding business for the soldiers. The Noble Lord the Member for Alder-shot referred to the suggestion to wind up the concern. I went into that matter in 1920. You could not wind up this concern. Speaking as a business man, I believe that if it had been wound up, the ex-service men would be worse off to-day than they are. Perhaps the Noble Lord does not realise the immense variation in percentages on wholesale prices for 45 commodities during the past few years. Take 1913 at 100 per cent. You get the following figures: 1917, 216 per cent.; 1918, 226 per cent.; 1919, 242 per cent.; 1920, 295 per cent.; 1921, 182 per cent. The last figure shows a loss of 100 per cent, in one year. An organisation such as the canteens was bound to lose immense sums when the fall came. I quite agree with the Noble Lord that possibly the management was not good; but we have to remember that the management was not under the control of the Government—it was entirely outside the Government. With regard to the £7,200,000, if you refer to the Report that was made in May, 1921, by the Committee with the hon. Member for Ecclesall (Sir S. Roberts) as Chairman,
you will find that they agreed with this sum. They state in the Report:
After the shares of the forces of the United States of America, the various Dominions and Colonies and India, have been satisfied, we believe that the amount available as the share of the United Services fund will not be less than the figure of £7,000,000, which has been quoted by Lord Byng as the amount which the United Services Fund expected to receive.
Apart from that, take the Chairman of the British Legion, Mr. Lister. I was not at the meeting, but I understand that he informed a Conference at the Cannon Street Hotel that £7,200,000 was an equitable figure to be handed over to the United Services Fund from the canteen profits. We also have Sir William Plender's final statement in the Report which he signed. He says:
… making a total of £7,200,000 odd, which in my opinion is a fair and equitable settlement.
I agree with that figure. I have fought to get the best price I could for the ex-service men, and I believe that this is a fair and just settlement.

Lieut.-Commander KENWORTHY: My hon. Friend who has just spoken is an acknowledged financial expert in this House, if he will allow me to pay him that compliment. But we have here the Report of a greater financial export, Sir William Plender. I would answer the hon. Member's speech by quoting two short paragraphs from the White Paper which has been issued. On page 7 of the Report Sir William Plender says:
I am informed that it is maintained by the Expeditionary Force Canteens officials that the conditions ruling at, and subsequent to, the date of the transfer, and the time which was allowed to the Navy and Army Canteen Board to reject stocks, should have enabled the Board to have earned sufficient profit on trading in the areas concerned, to cover losses incurred on liquidation.
Now there is no attack being made on the Expeditionary Force Canteens or their management. The hon. Member for Ilford (Mr. Wise) himself praised the Expeditionary Force Canteens. The hon. and gallant Member for Tonbridge (Lieut.-Colonel Spender Clay) also praised the canteens, and I believe their words will be echoed by many other hon. Members who have knowledge of the subject. Yet these officials of the Expeditionary Force Canteens who have been so praised, state the losses could have been avoided, and that is thought suffici-
ently worthy of notice to be included by Sir William Plender in his Report. If the hon. Member for Ilford will look at page 8 of the Report he will see this:
So far as I have been in a position to ascertain, the assets transferred have, in general, been valued either at fair value as between a willing buyer and a willing seller on 1st January, 1921, or at the estimated break up values which would have been obtained upon a forced sale.
I submit that these words of Sir William Plender answer the main defence of my hon. Friend the Member for Ilford, who seemed to be more concerned, may I say, with defending the United Services Fund, which no one is attacking, than with defending the Government. The only speech which really carried, in defence of the Bill—and it was a very half-hearted one—came from the hon. and gallant Member for Tonbridge. He made the extraordinary statement that the only people attacking this Bill were persons whose constituents were affected by the operations of the Board. I have received a resolution passed, with a dozen others, by the Chamber of Trade of Hull, to which I do not pay much attention, because it is merely a sympathetic resolution expressing general sympathy with the complaints of the traders in garrison towns. Hull is not a garrison town, and I have had no personal complaint in writing or verbally from any of my constituents. As far as my constituents are concerned, I am absolutely disinterested in the matter, and I say that if in normal times the Government had attempted to perpetrate this wholesale robbery on the soldiers—[HON. MEMBERS: "Oh, oh!"] Yes, I shall justify that statement in a moment. I know what I am talking about. Had the Government, as I say, done this in normal times, they would have been driven from office. Unfortunately, we are living in abnormal times. Scandals follow each other with 24 hours' interval between them, and they never have time to settle in the public mind. So many appalling things have happened as a result of the War and the clearing up after the War, and this Government has so hardened the conscience of the public to maladministration and bad government, that it is very difficult to raise the necessary public feeling. However, I hope times will be better in the near future.
The hon. and gallant Member for Ton-bridge talks about reckless charges being thrown about. Let me quote one of the charges on which I, in turn, base my charge of robbery of the soldier on the part of the Government. At the beginning of the War patriotic and sentimental people and newspapers started funds for providing cigarettes, Christmas puddings, periodicals, and so forth, for the troops. I can only speak for the sailors in small ships when I say we appreciated very much the gifts sent to us. We were absolutely cut off from everything, and these were about the only comforts we got, especially at the first Christmas. Then the Government issued instructions that it was not necessary for people to provide puddings or cigarettes or periodicals or things of that sort. They were going to do all that, and everyone praised them. If hon. Members will look at Part 1 of the Schedule to the Bill they will see an item—
Grants from the Expeditionary Force Canteen for the benefit of His Majesty's Military and Air Force,
and the amount is £599,000 odd. If hon. Members will now return to Sir William Plender's Report, they will see on page 6 this item:
General grants (newspapers, literature, Christmas puddings for the troops, recreational kit, etc.).
The amount there is £599,527. That money was not provided by the Government, or if it was, it is now being taken back from the soldier. It is being taken back from the ex-soldiers and the discharged men to whom it rightly belongs.

Lieut.-Colonel STANLEY: indicated dissent.

Lieut.-Commander KENWORTHY: It is no use my hon. and gallant Friend shaking his head. Can he explain it otherwise? Did they lead the public to suppose that it was the general taxpayer who was running these comforts? If they did, what right have they now to take the money back from the funds at the disposal of the ex-service men and their dependants?

Mr. WISE: Surely this has nothing to do with the Government at all.

Lieut.-Commander KENWORTHY: I say it has everything to do with the Government. Did Lord Kitchener when Secretary of State for War not say that
the funds derived from the profits of the canteens were to go to the men who built up those profits? Did he not give a pledge on behalf of the Government to that effect and was he not the Minister for War? Did the Government repudiate that pledg? If not, what right have they to take back with one hand what they gave with the other? If I could put it in a more emphatic way, I would do so. I am forced to do it. The Government's whole attitude on this business has been one of obstruction, of giving no information at all and of long delay. They gave no information, not even to my Noble Friend the Member for Aldershot (Viscount Wolmer) and others who raised the matter. But an inter-departmental Committee was set up, presided over by one of the persons who was being attacked in the House, namely, the Financial Secretary to the War Office, and there was a secret report. [HON. MEMBERS: "No, no!"] The minutes were not published.

Lieut.-Cotonel STANLEY: Does the hon. and gallant Member mean to say that I presided over a Committee which produced a secret Report?

Lieut.-Commander KENWORTHY: No, your predecessor.

Lieut.-Colonel STANLEY: Why does not the hon. and gallant Member say so?

Lieut.-Commander KENWORTHY: I do say so. I do not. wish hon. Members to be led into error. I say the then Financial Secretary to the War Office presided over the Committee, and if there has been a Report by the Committee, no one has been able to get it. I was not referring to the present Financial Secretary, but to his predecessor. I am not attacking the hon. and gallant Gentleman. But we want to see that Departmental Report. As to the hon. and gallant Gentleman s attitude on the question to-day, I do not object to the tone of his speech, but what we are attacking is the proposal of the War Office in regard to these funds.

Lieut.-Colonel STANLEY: The hon. and gallant Member says there was an Inter-Departmental Committee presided over by my predecessor at the War Office. Do I understand him to say that Committee was to deal with these funds?

Lieut.-Commander KENWORTHY: With the charges.

Lieut.-Colonel STANLEY: As a matter of fact the Inter-Departmental Committee was to decide whether there should be a permanent canteen organisation for the three Services. Is that the "secret Report"?

Lieut.-Commander KENWORTHY: We have not had anything about that. We have been refused information.

Lieut.-Colonel STANLEY: What has that got to do with this Bill?

Lieut.-Commander KENWORTHY: If Parliament is refused information about things, I call that "secret." We are entitled to have all the information that can be afforded on these subjects, unless it is not in the public interest to give it.

Lieut.-Colonel STANLEY: Has it anything to do with this subject?

Lieut.-Commander KENWORTHY: Yes, very much. It is a part of the whole situation.

Lieut.-Colonel STANLEY: It has nothing whatever to do with this subject.

Lieut.-Commander KENWORTHY: I am now quoting from the weekly paper to which the hon. and gallant Member for Tonbridge referred—"Truth."I do not accept every statement there, but certain charges are made in "Truth," and they should be investigated immediately

The SECRETARY of STATE for WAR (Sir Laming Worthington-Evans): Hear, hear!

Lieut.-Commander KENWORTHY: I suppose the attention of the War Office has been drawn to these charges. I suppose "Truth" is occasionally brought to the notice of the War Office. Have they written to the editor, and asked for his assistance to have these charges investigated? Reference is made to three accountants who were summarily discharged in Iraq. He calls them A, B and C. Has he been asked in confidence to give more information? He gives instances of canteen managers who, it was discovered, remitted very large sums of money which did not pass through the accounts, and the articles in that paper are given with an air of
authority as from people who have the facts. I dare say the paper may make mistakes, but it is not a paper which was started the day before yesterday for the purpose of attacking the present Government, and I think that when charges like that are made in a responsible paper, the Government ought to take very serious steps to investigate them. This is where the scandal comes in. During the War this great profit of some £10,000,000 or £12,000,000 was built up by the War Army, the citizen soldier, who formed the great bulk of the Army. The small professional Army was, as everyone knows, decimated very early in the War.
At the end of the War, the Government, for good or other reasons, decided that there should be a new canteen system, and I think there is a good deal to be said for it. I know that in the Navy, after tremendous agitation, and with tremendous opposition, as usual, from the Admiralty, we eventually got a new system of canteens for the Navy, which worked very well indeed, and nobody wants to go back to the old system. I daresay the Government could make out a very good case for having embarked on a different system of canteens for the Army, but what right have they to take the working capital from this fund that had been built up by the serving Army in the War? The Army to-day that is benefitting from this Navy and Army Canteen Board system is a new Army, and most of the soldiers are young boys. It is a very small Army compared with our great forces in the War. If we wish to finance the Navy, Army and Air Force Institutes, whether in Ireland or anywhere else, the Government ought to start de novo, and this fund ought to have been kept back for the men who built it up during the War, and for the widows and orphans of the men who laid down their lives in the war. I say that it is a great principle with which we are faced to-day, and that to take this money and build up this new system, however beneficial it may be, or however much it may help the present peace Army, the after-war Army, the new Army, is unjust to the men who built up the original fund.
There are many other matters to go into, but I do not want to stand in the
way of other hon. Members. I repeat what I said, that this matter is nothing more or less than robbery. It is robbery of the men who are now discharged from the Army and who want this money badly. There is no attack made on the United Services Fund or the Expeditionary Force Canteens, but there are serious allegations, which should be investigated, about the maladministration of the Navy and Army Canteen Board, and, for myself, I can see no excuse for these losses. They had a most privileged position. They have been allowed, in some cases, practically to expel the Young Men's Christian Association, so as not to compete with them; they have been allowed to have their correspondence franked; they have been allowed the use of Government land and buildings; they have had virtual monopolies in many parts of the country; and yet this very heavy loss of £2,500,000 has been made, which the Government ought to make good, which the taxpayers ought to make good, and not the ex-service men, to whom this money rightfully belongs. The intentions of the Board from the Government's point of view are good; they are to supply necessities for the soldier, and though, I suppose, there are soldiers who may maintain that champagne, Benedictine, silk stockings, and ladies' underwear are soldiers' necessities, I think the matter wants a little more investigation. It may be that they are required occasionally in officers' messes, or for soldiers' wives, but when there is a heavy loss made on the whole business—and I do not think I can be accused of undue hostility to Government enterprise—I think it is a scandal that the men who built up the original fund should be mulcted of the money to provide the working capital and to make good the deficiencies of this unsatisfactory and, in some respects, according to what the ex-service men tell me, this very unsavoury Government trading venture.
I said, at the beginning of my remarks, that my constituents, as traders and as shopkeepers and suppliers of the troops, as far as I know, are not in any way affected, and that part of the matter leaves me perfectly cold, but a great many of my constituents are ex-service men, in great trouble and distress to-day in too many cases, and when I see this proposal to take £2,500,000 of their money, on Lord
Kitchener's promise, and to use it for making good the mismanagement, and, I am afraid, in some cases, unless the charges are disproved, the dishonesty of the underlings of the Government, I must make my protest. We have been promised a half-day for a Debate on this subject, and I congratulate my Noble Friend on his success in getting that. Are we going to have the Select Committee? I understood last night that we were.

Lieut.-Colonel STANLEY: indicated dissent.

Lieut.-Commander KENWORTHY: We are not?

Lieut.-Colonel STANLEY: I meant that no promise of that sort was made last night.

Lieut.-Commander KENWORTHY: I see. It is my fault. I understood there was such a promise. I hope the hon. and gallant Gentleman will understand that I have no personal feeling at all in the matter, but I understood this Committee had been promised. I am wrong, but I hope the House will insist on a Select Committee being appointed, and, if the facts be as have been stated, woe betide the Government!

Mr. A. HOPKINSON: I should like to endorse what was said by the hon. and gallant Member for Tonbridge (Lieut.-Colonel Spender Clay) in regard to the Expeditionary Force Canteens. I am sure I speak on behalf of the great majority of my comrades when I say that the life of the soldier during the War would have been almost unendurable without that organisation, and I say that in peace time the same organisation must continue. I felt, during the experience of six months' barrack life towards the end of the War, that to be able to be free from all profiteering shopkeepers, such as the constituents of the Noble Lord the Member for Aldershot (Viscount Wolmer)—

Viscount WOLMER: Does the hon. Member charge all shopkeepers with being profiteers, or merely those who happen to be in garrison towns?

Mr. HOPKINSON: I am afraid the Noble Lord takes me too seriously. There is no question but that under the old regime of the contractor canteen the troops did have to pay very large sums of
money for very inferior stuff, and there was also a tendency on the part of the contractors to persuade troops to consume a good deal more alcohol than they would have consumed if the contractors' profits had not depended on the amount consumed. Hon. Members who have not had experience of the Army in recent years are probably unaware of the arrangements which have been made in regard to wet and dry canteens—and here I speak also of the hon. and gallant Member for Central Hull (Lieut.-Commander Ken-worthy), who has had no experience whatsoever of the Army, and does not know what he is talking about—

Lieut.-Commander KENWORTHY: I do not take the hon. Member seriously either.

Mr. HOPKINSON: In these days, when a very large number of young boys are taken into the Army, I do think the system has been a most excellent one, and works admirably, but the dry canteen, necessarily and rightly, I think, tends to undertake more duties as time goes on. It is a recreation room, and it provides a stage for dancing or performances, it provides a place where one can sit down and get one's supper, because, for some reason or other the War Office does not provide the soldier with any supper—I cannot understand why. The dry canteen also provides a billiard room and a library, and in every way it benefits the soldier enormously during the period of service. Surely it is far better that we should continue this plan of working these regimental or barrack institutes upon a co-operative basis, rather than upon a basis of private trading. I should like in future to see the troops more associated with the management of these canteens, so that they may, during their period of service, gain some little insight into the methods of trading, and may, when they leave the Army, be of use to those great co-operative societies which form such an important feature of life outside the Army.
The important point is this. It would be a very great retrogressive step to go back to the old canteen contract system. Before it was abandoned, as is well known, there were some very grave scandals connected with it, and that same weekly journal which is now attacking the Navy and Army Canteen Board and the
Expeditionary Force Canteen was responsible for showing up some of the worst scandals of the old contract system. I think I may say that very possibly this controversy has arisen through a misunderstanding. It would appear, from what the hon. and gallant Member who spoke first said, that those who are agitating against the Navy and Army Canteen Board and the Expeditionary Force Canteen wish, in the first instance, to get the accounts of those two departments of the same organisation separated, 60 that the loss which was made on liquidation by the Expeditionary Force Canteen should not be deducted from the profits of the Navy and Army Canteen Board.

Lieut-Colonel NALL: What is objected to is losses made since the War being paid for out of profits made during the War.

Mr. HOPKINSON: And with a view to following out that policy, the accounts of the two should be kept separate.

Lieut.-Colonel NALL: If it were only a question of losses in value of stock, it would be rather different, but the losses have arisen under different headings.

Mr. HOPKINSON: I merely want to get at the bottom of the misunderstanding which has, unfortunately, arisen. Surely a very large amount of the capital account of an institution like the Expeditionary Force Canteens would lie in articles which were valuable as long as the thing was a going concern?

Viscount WOLMER: Is the hon. Gentleman aware that this loss of £2,500,000 is over and above the full allowances of the liquidation loss allowed by the auditors of the Expeditionary Force Canteen?

Mr. HOPKINSON: That £2,500,000 loss is bound, in any balance sheet, to include loss on liquidation, otherwise the balance sheet would be perfectly useless for any purpose. If a trader over a certain period makes a trading profit, and has to write down his stock to such a figure that a greater amount than the profit during that period has to be deducted, then there is a net loss, just in the same way as a net loss is shown on this account. In addition to that, in the nature of the case there must have been much pilfering during
the War. But compare losses of that sort through the dishonesty, and, possibly, the incompetence of the people managing, with the losses due to the dishonesty and incompetence of people who were supplying army munitions. I need not say more about it. We all know that some £12,000,000,000 was spent for the purposes of the War, that a very large portion was spent on munitions, and that enormous sums were distributed to useless, dishonest and unpatriotic men. Therefore, if the loss due to pilfering or to incompetence in the Expeditionary Force Canteen and the Navy and Army Canteen Board be not any greater than might possibly be deduced from the figures in these accounts, I think we may say that, on the whole, they have shown up extremely well as compared with other Departments of the Government.
The Navy and Army Canteen Board and the Expeditionary Force Canteen were practically a necessity to the soldier during the War. I do not, for a moment, wish to minimise the work done by voluntary associations such as the Young Men's Christian Association, the Church Army or the Salvation Army, but the fact remains that we simple soldiers knew that if we took our pennies to the Navy and Army Canteen Board or the Expeditionary Force Canteen, we got very much better value for our money than at any of the voluntary associations. I think the vast majority of men in the Expeditionary Force will bear me out, but I do hope that this House will not suddenly jump to the conclusion that, because there has been a loss on part of the trading, although there has been a gigantic profit on the whole trade, that loss must have been due to some attempt on the part of those responsible for these organisations to rob the ex-service man of his due. It would hardly be in order, although some speakers have touched upon this point, to give what I think to be the opinion of the bulk of ex-service men, but I think, if one could get a collective opinion, the opinion of the majority of the ex-soldiers in this country would be somewhat on these lines, that admirable as is the work which has been done by Lord Byng and those who work so hard with him, it is better now that we should obliterate the ex-service man once and for all, that the Englishman who went into the army to defend his country was a soldier to the
backbone when he was there, but all that he asks, after finishing his time, is to be regarded as a civilian pure and simple, and not to be set apart as a member of a peculiar class in the country—a peculiar class which is bound to be regarded ultimately as a collection of cadgers.

Mr. TREVELYAN THOMSON: As one who, I think, can claim more experience in the ranks than the hon. Gentleman who has just spoken, I must say that I agree with his preliminary remarks, but not with his conclusion. I agree that the services rendered then, and rendered now, by the Canteen Board are invaluable, but that is not the point really before the House at this moment. The point which, I think, interests the House, and particularly the ex-service men, is what is to become of this large balance, whether £2,000,000 or £4,000,000, which, it was anticipated, they would got when the funds of this canteen were wound up. I submit to the Minister that there is large concern in the country on this point. As the right hon. Member for Peebles (Sir D. Maclean) so well said, it is impossible in Debate on the Floor of the House, either now or in the autumn, to get at the truth in this matter, and, seeing that there is so much concern, I do hope the Government will give way and allow a Committee of this House to be set up to inquire into this question. If there has been no fraud and no mismanagement, then, surely, it is to the advantage of everyone concerned that that should be known? So long as these reports, based on circumstantial evidence, are going round, there will be this uncertainty and this dissatisfaction, until we have a real inquiry to settle the matter. Might I say I think the figures given to the House by the hon. Member for Ilford (Mr. Wise) rather support the case against the Government than the case he was anxious to make? He told us that there must be a loss on liquidation. We agree, but what should be the extent of it? He gave figures in regard to the average wholesale prices of 48 articles. In 1919, he stated, the figure was 242, while in 1920 it had gone to 295; subsequently, in 1921, it had fallen considerably. He quoted cases showing the fall between the maximum of 295 and the minimum in 1921 of 100 points less. He suggested that there must be a big loss, but this liquidation began in May of 1919? Stocks were
handed over on the basis of 242. I put it to the Government that, in ordinary business concerns, any receiver put in to liquidate or to wind up a business would certainly be held at fault if he delayed winding up the business for such a lengthy period that the profits he might have made were subsequently lost in the fall in prices that took place over two years after.
I submit there is good ground for the charge of neglect that has been made, and that ordinary business acumen has not been shown in endeavouring to liquidate during the 12 or 18 months of high prices instead of waiting for two years until the slump arose, and the fall came. Therefore, I submit that on the figures of the hon. Member for Ilford there is a strong primâ facie case for an inquiry to show whether or not neglect took place. I do not agree with the Noble Lord the Member for Aldershot (Viscount Wolmer) that the Canteen Board should be done away with. There is need for a continuous policy; but surely it is not right to carry such stocks for a small army, stocks more than large enough for the huge armies of the War period. The surplus stocks should have been liquidated by the Government long before. I appeal earnestly to the Government even now to relent from the attitude taken up in the interests of the ex-service men who are concerned about the promises they received, and the big sums they rightly anticipated they would get. Let them know whether or not there has been a mistake, and so remove the suspicion which will remain in the public mind unless we can get at the truth. That truth we cannot get by means of exchange and Debate on the Floor of this House.

Lieut.-Colonel POWNALL: In addition to the charges made in regard to the losses, I must say that in this matter I regret the use of the words "scandal and robbery." These words have been put in large type in the Press, and they have given a false impression to the public outside, and especially to the ex-service men. Knowing the facts as I do know them, I say there is no justification for such words. First of all with regard to the delay, what the critics of the Government rather forget is that the ramifications of this business extended over the whole world, and that demobilisation was in many cases delayed owing to transit
and other difficulties till well towards the end of 1919, and even later in some cases. It so happens that I am connected with another business which also has to attend to the winding up of accounts and losses which arose during the War. I refer to the big corporation of Lloyds. In the old days we used to take about two years to find out what were our total claims, and we then knew how we stood. Owing to the entirely different conditions prevailing during the latter part of the War, and since the War, we are still getting in claims which arose during the War years. My own impression is that the War Office have done quite well to get these accounts up to the 31st December, 1920, in by July, 1922. So far from being backward they have done better than their competitors at Lloyds in this matter of winding up their War losses.
1.0 P.M.
On the general question of the losses, anyone who has had any experience at all with regard to liquidation since the War of the very large stocks accumulated at the latter part of 1918, and in many eases 1919, must realise that though £2,500,000 sounds a very large sum these things are themselves a question of proportion. I do not know what is the figure of the stocks that the Expeditionary Force Canteens held in November, 1919, or what they were valued at. But in view of the Minister's statement, I do not myself think that the loss of £2,500,000, whether 10 or 20 per cent. of the stocks that they then held, or were definitely committed to, is at all an unreasonable loss. It is always helpful in these matters to find out what suggestions the critics of the Government make in regard to the action the Government should have taken. The suggestion of the Noble Lord the Member for Aldershot was that on the 1st May, 1919, all these commitments ought to have been wound up. I presume the natural corollary should be that contractors should have been invited in May, 1919, to take over all the stocks, and that the hundreds of thousands of men who were then being demobilised should have been handed over to the tender mercies of contractors. I myself do not think there would have been any contractor to have taken over the work. Really, when we are dealing with business matters, such hopelessly
impracticable proposals do not help very much, especially when they arise three years after the event. I wonder whether the Noble Lord made that suggestion in May, or June, 1919? It is so very easy to be wise after the event, and it is even more easy, in some cases, to be unwise after the event.
A further point is this in regard to these profits, which obviously were only arrived at after the valuations made by the Expeditionary Force Board. These profits were only on paper. They did not exist in cash. £2,000,000 has not disappeared. An article which cost 1s. three years ago, it may be, has depreciated now to only 8d.—hence the difference. You can scarcely wonder that the Expeditionary Force Canteen Board or the Army and Navy Canteen Board found matters difficult when private firms of the greatest reputation found them difficult during these three or four years. Then the hon. and gallant Member for Hull (Lieut.-Commander Kenworthy) was very much wide of the mark in regard to the question of the trading profits made by the Air Force Institute. Apparently he does not realise that is being run entirely separately, and, strictly speaking, it hardly arises at all. The 8 per cent. handed over to the troops for recreational purposes were a godsend to the commanding officers during the War. While as a general rule I am a strong opponent of any form of State trading, I do feel that in the exceptional circumstances which prevail in regard to the canteen system, despite the reports which we heard of before the War and the scandals which prevailed in those days, an overwhelming case has been made out for the continuance of the present state of affairs. I also feel there is no case made out for any State of inquiry or any form of inquiry into the actual losses or the general establishment, when Sir William Plender himself says at the end of his Report:
That an appreciable deficiency will have resulted is undeniable, and whilst its precise measure is impossible to determine now, I cannot resist the conclusion that the opinion expressed by Sir Charles Barry and Mr. J. C. Goff has a substantial and reasonable foundation for acceptance.
If it was impossible to determine the precise measure of the loss at that time what possible chance is there now in the autumn of 1922 to get at it by an inquiry with regard to a thing which happened two
or three years ago, many thousands of miles away, with officers a majority of whom have been demobilised for many months.

Mr. PENRY WILLIAMS: I join in asking the Government for some statement as to their intentions in this matter. As I understand it, an agreement has been arrived at between the Government and the Noble Lord the Member for Aldershot (Viscount Wolmer) whereby half a day will be given in the Autumn Session for the discussion of this matter. If that is the sum total of the Government's position it is very unsatisfactory. If the Government have already made up their mind that they will not appoint a Select Committee or allow the matter to be investigated we might as well save that half day and be content with the discussion this afternoon, but if the Government are prepared to set up a Select Committee of any sort or kind, then I think we should be told so, for I believe that half day could be used to great advantage. Looking at the matter from the point of view of the ordinary man in the street, the controversy amounts to this: There are two sets of trustees. First, there are the trustees appointed by the Army Council to receive the assets of the Expeditionary Force Canteen. They took over from that body a net profit of over £10,000,000. So far as I can gather they made no protest as to the amount and they entered no caveat with regard to it. It was not disputed as far as I know. Then there was another body of trustees set up—the trustees of the United Services Institute, and they were handed over by the first body of trustees a sum of about £7,000,000 of profit. Thus there was a deficiency or difference of £3,000,000. Where has that money gone to? It is really no good trying to arrive at a conclusion as to that on the floor of this House. There has been printed an article which contains very many accusations that ought to be proved or disproved.

Lieut.-Colonel J. WARD: What are they?

Mr. WILLIAMS: They are in this paper I have here.

Lieut.-Colonel WARD: I never heard of such charges.

Mr. WILLIAMS: If the hon. and gallant Gentleman challenges me to read them I have no alternative, but I do not want to weary the House by reading the whole article. There is one definite charge that a certain official remitted money home. There was an inquiry made, I presume by the authorities, through the bank which proved that he had remitted the money home, but no action was taken against him. That is a very serious charge and I do not think the Government can really refrain from inquiring into the whole matter. The position of the Government is this—that if there is nothing in it, if there is no fraud in the matter, then no harm can be done by an inquiry, for it would prove that the charges have been made falsely and that the Government Department is free from blame. But if there is a fraud and if the Government attempt to protect people guilty of that fraud they become participants in it. I am quite certain that the Department of which the Secretary of War is at the head has no desire to conceal any matter of this kind and is as anxious as we are for clean government in this country. It should, therefore, be quite willing to have the whole matter cleared up, so that the public may know exactly where we stand. I hope that the Government will be able to announce now that they are prepared to appoint a Committee to investigate the whole matter and let justice be done whatever happens.

Sir L. WORTHINGTON - EVANS: Perhaps the House will think it right that I should now reply upon the Debate, and say why this Bill is necessary. The right hon. Baronet the Member for the City of London (Sir P. Banbury) suggested that had it not been for what is contained in the First Schedule, there would be no necessity for the Bill at all. He seemed to think—catching some of the infection going about in the House—that there must be some fraud, or otherwise there would be no necessity for Schedule 1 of the Bill. But Schedule 1 of the Bill is required to validate payments which have been made in good faith during the last two or three years out of the money, profits, or rebates arising from canteen trading, and which are technically public moneys which ought to have been paid into the Exchequer. That was a discovery that was made by the Law Officers of the Crown in connection with
a case put before them a few months ago. As soon as we found that these were public moneys, it became clear that we ought to come to this House to authorise the payments that had been made. We have also in hand—or rather the canteen organisation—not the War Office—I will draw a distinction between the two presently—has in hand a further sum which ought to be paid over at once to the United Services Fund, as the representatives of the ex-service men. That sum cannot be paid over, because it is public money, until the House has authorised payment, and therefore the Bill is necessary both to authorise payments made from time to time out of the interim profits and rebates, and also this final balance which is due to the ex-service men.
As Secretary of State for War, I find myself in this position. During the War my predecessors quite rightly, I believe, in the unanimous judgment of the House, set up a canteen organisation, so that the serving officers and men might be looked after in their distant stations during the War. There is no dispute that that was a desirable thing. At that time the statement was made that it was not intended that any profit which should be made should be diverted from those out of whom it was made. It was promised that whatever surplus there should be out of the canteen trading should be handed back to the soldiers, or rather the ex-soldiers, their wives and dependants. I find myself in this position. There is as a result of the canteen trading a considerable sum in hand. A dispute has been raised in this House by the Noble Lord the Member for Aldershot (Viscount Wolmer) from time to time as to whether the amount in hand is what it ought to be, or whether there ought to be more in hand. I have had to find out as best I could what sum was due to the ex-service men, because naturally the Government want to see that every promise made by them is completely fulfilled, and that the whole sums to which they are entitled shall be paid over to them at the earliest possible moment. That is the only object of the Government. I have been pressed from time to time to publish the trading accounts of these various organisations. My Noble Friend
has been impatient, and he has even suggested that the War Office were trying to hide the accounts. That is far from the fact. We have no desire to hide the accounts. The very moment that they were available the accounts were submitted to the House in the form of a White Paper. I tried to understand those accounts. I do not pretend to be an accountant, but I pretend to be an ordinary person, and accounts ought to be such that we can understand them, more or less. I could not understand those accounts either more or less, and so I went for advice to Sir William Plender, who is a leading accountant, at the very head of his profession. I said to myself, "I will get the best man that I can to advise me on these accounts, and the advice which he gives to me I will tender to the House of Commons. I will publish it, so that they shall be in exactly as good a position as I am in the matter." The report was made. Being in the nature of a trustee as between the past and future, I wanted to know whether the sum that was being paid over was the right sum to be paid over, or whether the ex-service men were entitled to something extra or beyond that sum, because that had been suggested? Sir William Plender advised me, and that advice is published. He says, on page 11, paragraph 11, of his Report:
The payments already made and investments transferred to General Lord Byng's Committee and its successors, the United Services Fund, are £3,729,000"—
with some odd hundreds—
and it is proposed that a further sum should be handed over in cash of £3,471,000, making a total of £7,200,000, which in my opinion is a fair and equitable settlement.
That was what I wanted advice about. I wanted to know whether that sum was a fair and equitable settlement of the undertakings given by the Government to the ex-service men, and the leading accountant in London—very likely the leading accountant in the world—has advised me that it is a fair and equitable settlement, and upon that I come to the House of Commons with this Bill asking them to legalise the past payments, and to legalise the payment of the balance.

Viscount WOLMER: On page 9, Sir William Plender explicitly says that he does not make any pronouncement upon the matter of policy.

Sir L. WORTHINGTON-EVANS: I know, but it is not a question of policy; it is a question of figures. It is a question whether this amount is or is not right; that is what I asked him to advise. It is a question of figures, not of policy. There is a question of policy, which I am not going to shirk; but it has nothing on earth to do with Sir William Plender, who was asked to advise about the figures. I had to establish, therefore, in my own mind that this settlement proposed was fair and equitable, and I think I have done that in the method that I have described, and I hope that the House will accept it. I gather that they are unanimously prepared to accept it, provided that some further inquiry be made, and I am going to deal with that question in a moment. First, I want to deal with the newspaper statements. The paper to which the hon. Gentleman referred just now—

Mr. P. WILLIAMS: I do not vouch for their accuracy.

Sir L. WORTHINGTON-EVANS: That is the difficulty. The paper to which the hon. Gentleman referred just now has made some definite charges. It has stated that there was a certain person who remitted home £700. Of course, my hon. Friend says that he does not vouch for it, but, nevertheless, he quotes it, and the Noble Lord the Member for Aldershot has also referred to it, thus creating an atmosphere of suspicion in the House which must be dealt with. I make this statement. If my Noble Friend or the hon. Gentleman will give me anything which enables me to say that there is a primâ facie case of somebody having committed a fraud, I will have it investigated to the fullest possible extent, and, if there be a prima facie case, it shall go before the Law Officers for the purpose of a prosecution.

Lieut.-Commander KENWORTHY: As I was one of the Members who quoted this paper—and I stick to it—may I ask if the right hon. Gentleman has sent for the editor of "Truth," written to him, or applied to him. He says he has the particulars, and the proofs. Or else will he prosecute him?

Sir L. WORTHINGTON-EVANS: The hon. and gallant Gentleman may rest assured that I do not mean to burke any
single one of these points. I say that, if any hon. Gentleman has, or can get from newspapers or any other source, any information which goes to show that there is a primâ facie case against any one of the employés of any of these canteen organisations, I will have it investigated with all the information that can be obtained, and, if there be a prima facie case, the papers shall go before the proper Law Officers, for the purpose of a prosecution. Hon. Members must realise that the one thing which the Government must necessarily wish is not only to have a fair settlement, but to make those who receive the money think and know that it is fair. There is nothing so harmful as creating suspicion in the minds of ex-service men. After all, most of them have not had the opportunity of dealing with millions; tens and ones are much more nearly their figures. If they hear that the Noble Lord the Member for Aldershot says that £4,000,000 has been taken from the pockets of the ex-service men—that is his charge, without one scrap of evidence—

Viscount WOLMER: My evidence is in this Report. I do not say fraudulently taken.

Sir L. WORTHINGTON-EVANS: This is interesting. The Noble Lord says that £4,000,000 has been taken from the pockets of ex-service men, but not fraudulently taken. Is that the charge?

Viscount WOLMER: Yes.

Sir L. WORTHINGTON-EVANS: Not fraudulently taken?

Viscount WOLMER: May I explain the charge to my right hon. Friend, if he does not understand it? My charge is this Owing to the policy which the Government has followed, of continuing on a peace footing the War organisation and using the profits of the War organisation for that purpose, a sum nearer £4,000,000 than £2,500,000 has been taken from what would otherwise have been available for the ex-service men.

Sir L. WORTHINGTON-EVANS: I am very glad that my Noble Friend has made that explanation.

Lieut.-Commander KENWORTHY: He made it before.

Sir L. WORTHINGTON-EVANS: Let us see to what it amounts. He thinks that if three years ago something different had happened, £4,000,000 of profits would have gone into the pockets of ex-service men.

Viscount WOLMER: Yes.

Sir L. WORTHINGTON-EVANS: That is much less offensively stated than the way in which the Noble Lord stated it before. It is not only less offensive, but it is much less likely to be misunderstood outside this House. We are quite accustomed inside this House to saying things, and expecting hon. Members to realise in what sense we say them. On the other hand, if the words used by the Noble Lord were extracted from the rest of his speech, which very likely they might be by someone much less well disposed than himself towards the stability of the State, it might be suggested that the Government had been robbing the ex-service men of £4,000,000. Indeed, the hon. and gallant Member for Hull (Lieut.-Commander Ken-worthy) did use the words "wholesale robbery," and it is that sort of expression to which I object. It is that sort of expression which would make me refuse a Select Committee to consider this matter if I thought only of the speeches made by the two hon. Gentlemen. What has actually happened, as I am informed is, that the Expeditionary Force Canteens made a profit of £10,000,000, subject to the realisation of the stock. There was no £10,000,000 in cash. The so-called profit consisted of cash, and of other assets, and it was in the course of the realisation of those other assets at a time when the market was glutted that the depreciation of the stock occurred, and a much lower sum was realised than was anticipated at that moment, and lower than was anticipated by the Noble Lord the Member for Aldershot. It was well known when the Expeditionary Force Canteen stocks were transferred to the second organisation for realisation that there would be a loss in the course of the transfer, and it was specially provided that such a loss should be debited to this £10,000,000. Those connected with the United Services Fund have always known that there was likely to be a loss, and when we are told about the loss having been hidden, and then surreptitiously debited to the £10,000,000, there is no such case. Whether there
ought to have been a better realisation of the assets is another matter, and I cannot express an opinion upon that; but that there has been complete and transparent honesty throughout I have not the slightest doubt. With regard to the £4,000,000 loss alleged by the Noble Lord, he gives as an example a loss of £100,000 on a funding loan. That is the one item out of all this rather nebulous £4,000,000 which you can really check. Does the Noble Lord think that ought to have been lost?

Viscount WOLMER: If that money had been got for the ex-service men, it should have been put on deposit.

Sir L. WORTHINGTON-EVANS: At that time great appeals were being made to every patriotic man to support the financial policy of the Government, and the Noble Lord tells us that the ex-service men should keep their money on deposit, while everybody else should invest in the Funding Loan. If that is the way the Noble Lord builds up his £4,000,000 loss, then I am quite willing to accept it as a loss. I do not know whether this £2,500,000 of loss on realisation was or was not a reasonable amount. We have had in the course of the Debate speeches from the hon. Member for Ilford (Mr. Wise) and others, and this loss did not appear to surprise them in the least. Perhaps I am not sufficient of a business man to know whether it was a reasonable loss or not, but I have noticed that a great big trading company, like Messrs. Crosse and Blackwell, managed to lose £1,000,000 quite recently, and if that sort of thing is done by a great trading corporation I am not in the least surprised, when I remember that these assets were in every quarter of the globe, that such a loss was made on realisation. I wonder whether hon. Members have considered this so-called loss in its proper proportions. I am told that the turnover of this Canteen trading organisation was £150,000,000. I do not know how much stock they had, but I do not think, taking the actual figures, that there has been a very large loss out of a total of £150,000,000 on realisation.
The question I have to answer is whether I should have an inquiry or not. If the only speeches that had been made were those of the Noble Lord the Member for Aldershot and the hon. and gallant
Member for Central Hull, I should have refused it, because they have not made out a primâ facie case beyond the suspicion engendered in their minds. When, however, my right hon. Frrend the Member for Peebles (Sir D. Maclean), representing the Opposition, says to me seriously that it would be wise to clear up in the minds of all concerned, including the ex-service men, any doubt or suspicion, I at once agree with him. I am going to do this because I want the ex-service men, not only to have this money, but to have the means of knowledge as to whether it is the right sum or not. I also feel that the management concerned in these canteens is entitled to this inquiry. Wild charges have been made and these people are entitled to meet the aspersions made upon their management.

Lieut.-Colonel J. WARD: Will they get an apology from those who have made these accusations, when they have proved them to be untrue?

Sir L. WORTHINGTON-EVANS: I am going to provide the opportunity for them. As regards the Government, there is nothing we want except a full and complete exposure of the facts, whatever they be. The Government is willing to have this inquiry, and to have it now. We do not want it to wait until the autumn. Suspicion grows rapidly when once charges and accusations of this kind have been made. I am going to ask the House to agree to set up a Select Committee on this question, with power to sit during the Vacation. Then, when the half-day which the Noble Lord has been promised in the autumn comes, the Report of that Committee can be debated in this House, and then it will not really be a Debate as to whether or not the Committee should be set up. I think that is a practical way of at once getting to the bottom of this matter, and it will be for those who have made false charges, if these charges prove to be false, to do what is necessary on that Report being placed before them. I do not think that J ought to conclude without thanking the civilians who helped in this wonderful canteen organisation during the War. We have had to-day first-hand testimonials of the general ability with which the canteen organisation was carried on during the War. One hon. Member below the Gangway was in the ranks, and he told us what it meant to the serving
men in the ranks. Another hon. Member paid a similar tribute from the officers' point of view, and I have not any doubt that the thanks of the Army—the serving soldier and the ex-service man—are due to Sir George May, who for a long time looked after this work, to Sir Alexander Prince, to Sir Francis Towle, and to Colonel Benson who, in one organisation or the other, were primarily responsible for the work that was done.

Lieut.-Commander KENWORTHY: What about the "Truth" charges?

Sir L. WORTHINGTON-EVANS: I thought that I had dealt with "Truth." If any hon. Member can give me information, either from a newspaper or elsewhere, I will have that independently investigated, and shall be prepared, if the ground exist, to have a prosecution started.

Lieut.-Commander KENWORTHY: What I asked when I spoke was, has the War Office yet had the opportunity or the time, or are they proposing, to send to the editor of "Truth" to ask him for the facts of the case?

Sir L. WORTHINGTON-EVANS: If the War Office is, in the hon. and gallant Member's opinion, at all neglectful, the Select Committee will have the power to compel the attendance of witnesses. The War Office have no such power. If the House will give me the Second Reading now, I want to ask one more thing from them, and that is to let me have all stages of the Bill to-day. We have had a discussion, and there is really nothing in Committee on this Bill, so that it can be done quite easily with the assent of the House. The sooner it is done, the sooner the ex-service men will get their cheque. We have had a full discussion, there is nothing new that can be raised in Committee, and I would ask that all stages of the Bill may be taken now.

Sir D. MACLEAN: If I might say just a word, with your permission, Mr. Deputy-Speaker, and that of the House, I should like to say that I appreciate the very frank and courteous way in which my right hon. Friend has met the discussion to-day, and I can only show my appreciation of that by joining in his appeal that all stages of the Bill should be taken to-day. I am certain that the Select Committee, whose terms of reference, no doubt, we
shall get and agree, will conduct an impartial and a most efficient examination of the whole matter.

Lieut.-Commander KENWORTHY: Might I, by the leave of the House, say a word—

HON. MEMBERS: No, no!

Mr. DEPUTY-SPEAKER (Mr. James Hope): Apparently the hon. and gallant Member has not the leave of the House.

Question, "That the Bill be now read a Second time," put, and agreed to.

Bill read a Second time.

Motion made, and Question proposed, "That this House will immediately resolve itself into the Committee on the Bill."—[Sir L. Worthington-Evans.]

Lieut.-Commander KENWORTHY: I am a very young Member of this House, but I must say that it seems to me that this practice of passing all stages of a Bill in one day, simply as the result of an appeal from the Government, is a growing one, and is dangerous. For once I regret the absence of the right hon. Baronet the Member for the City of London (Sir F. Banbury), who is a constitutional pundit on these matters. I should have very much liked to have had his view on the subject. I do not think that this Bill ought to be passed through all its stages to-day. We have had a discussion, but, after all, there has not been very much time for us to look into these accounts, as the Government themselves admit. We have not obstructed, but have given every facility, as we promised, for the Bill to go through, and I think the least the Government can do is to promise to give us another day. I think I can say, on behalf of my hon. Friends, that we do not want to obstruct the Bill, but we want another opportunity, on the Third Reading, of, perhaps asking certain questions or clearing up certain points. This is a matter of the utmost importance.

Lieut.-Colonel J. WARD: What about the soldiers?

Lieut.-Commander KENWORTHY: They are getting as much money as is required. It is available, is being paid out, and it will make no difference whatever.

Lieut.-Colonel WARD: I know they are not.

Lieut.-Commander KENWORTHY: I should like to hear what is the view of the Government on the matter. In any case, it is a very unfortunate attitude for them to take up. We are practically being forced, by appeals to sentiment and the desire to help the soldiers, to throw away constitutional safeguards, and I feel that it is a very dangerous proceeding.

Viscount WOLMER: May I appeal to the hon. and gallant Member to withdraw his opposition? I think the Government have met us perfectly fairly. They have granted us everything for which we asked, which was simply an inquiry, and everything that my hon. and gallant Friend or myself or other hon. Members desire to find out can be found out through the Select Committee. It seems to me that only harm will result from postponing the passage of the Bill.

General Sir IVOR PHILIPPS: I hope we shall be able to pass the Bill to-day, but before that be done there is one point that I should like cleared up. This Bill allots certain money, and I am inquiring from the point of view of the country generally. The Secretary of State has said that he does not wish to rush this Bill through, as I am sure he does not. But supposing it should be found that there were further sums due to the ex-service soldiers, this Bill, as I understand it, would not prevent a further Bill from being brought in to hand over further money. I should like to be satisfied on that one point.

Sir L. WORTHINGTON-EVANS: I believe this Bill exhausts all the available money, but supposing that some great sum of money were recovered from somewhere or other, it would then have to be dealt with.

Sir IVOR PHILIPPS: My point is that charges have been made—I do not believe them, but still they have been made —that this money has been improperly used by the Government for other purposes. I do not believe that, but supposing for a moment that it were found that, say, £100,000 had been improperly used, would it be possible for the Government to introduce a further Bill, or does this settle it?

Sir L. WORTHINGTON-EVANS: It is obvious that if there is some further sum this Bill does not deal with it. It only deals with the sums to which it refers. My imagination will not go so far as that of my hon. and gallant Friend, but, if there were another sum, another Bill would have to be introduced.

Mr. RAWLINSON: The Government have acted fairly towards the points that have been raised, and, therefore, it is with all the greater strength that I venture to make a humble appeal to them that they will not follow this bad precedent of taking all the stages of the Bill in one day. The only stage put down for to-day was the Second Heading, and a number of hon. Members who may be interested in the matter may want to raise some particular point, and may think that they will have a further opportunity of raising it, for instance, on the Third Reading. If all the stages of a Bill are taken in one day, the House loses touch with it altogether, and it is not fair, however strongly we are in favour of this Bill—and I am not saying a word against it—to take stages which have not been put down. I think we might get an undertaking from the Noble Lord not to put down any Amendment to the Motion for Third Reading, but I would strongly urge that we do not part with the Bill to-day. This is one of the things about which I feel most strongly. I have seen mistake after mistake occur when things have been rushed through.

Sir L. WORTHINGTON-EVANS: I would ask the House to give me the Committee stage now, and then I can meet my hon. and learned Friend by leaving the Third Reading for another occasion. I do not want to follow bad precedents, and I quite realise the points that he has put to the House.

Lieut.-Colonel WARD: I am extremely sorry that the right hon. Gentleman is giving way to these academic views, which really have their origin in obstruction. Some 11,000 men passed through my hands for enlistment and training during the War, and naturally I have an immense correspondence with the men and with Lord Byng in relation to these funds. I know that the United Services Fund is almost exhausted, and that many of these poor fellows who ought to receive assistance have their chance of receiving that assistance delayed merely
because this money is not paid over. Apart from academic views, I am in favour of protecting every privilege of the House, but I do think we are stretching that too far when we are preventing these men from getting their own money.

Mr. RAWLINSON: May I suggest that the Third Reading be left over till Monday or Tuesday? It cannot make very much difference whether it is passed by Friday or Monday.

Question put, and agreed to.

Bill accordingly considered in Committee.

[Mr. JAMES HOPE in the Chair.]

CLAUSE 1.—(Sanction of disposal of sums derived from canteens.)

(1) The sums mentioned in Part I of the Schedule to this Act shall be deemed to have been lawfully distributed and disposed of.

(2) The sums mentioned in Part II of the Schedule to this Act shall be distributed and disposed of in the manner provided in the said Part II.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Lieut-Commander KENWORTHY: We do not want to obstruct the Bill, but I should like to take the opportunity of asking one question to which the right hon. Gentleman did not reply. It deals very much with the subject of the Clause, namely, the disposal of the sums derived from the canteens. The charge I brought against the Government, which up to now I stick to, because I have not heard a reply, is that the working capital for the peace-time Navy and Army Canteen Board organisation should have been supplied by the Army Fund and not out of these funds. It is catering for the new Army very largely, and the men who are entitled to the money are with the Army now. Otherwise, unless I can get a very good reason, I think it amounts to robbery.

Mr. MILLS: I must support the hon. and gallant Gentleman's protest. I do not think it ought to be disposed of like this. These are the moneys of the men who served, and although they may be demobilised now and in civil life, they are possibly in greater need of it than men who are receiving much more money now in times of peace. If it is allowed to go as it is, there will be much keener
resentment than if there is some discussion or answer, or explanation.

Sir L. WORTHINGTON EVANS: There has been considerable discussion going on for the last three or four hours when I do not think the hon. Member was in the House. Had he been in his place, he would have heard the whole of these points discussed, except the one—[Interruption.] He would be in a better position to say that if he had listened to the discussion. There are other and more relevant points. Let me answer the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy). I understand his point to be that the new Army, Navy and Air Force Institutes ought not to be financed out of moneys made during the War.

Lieut.-Commander KENWORTHY: Part of the Navy and Army Canteen Board was formed before the Armistice was signed. The two sums ought to have been kept absolutely separate.

Sir L. WORTHINGTON-EVANS: The short answer to that is this. £7,200,000 is being paid over to the United Services Fund. That came from both organisations, the Expeditionary Force Canteens, and the Navy and Army Canteen Board. That is, in Sir William Plender's opinion, a fair and equitable settlement, and that is a conclusive answer to the hon. and gallant Gentleman's question, unless some other fund is found by the Select Committee. So that the answer really is that those two funds are covered by the Plender Report.

Lieut.-Commander KENWORTHY: I thank the right hon. Gentleman for his reply. I am only satisfied with it in so much that he has agreed to set up this Committee and I take the opportunity of thanking him for it. I may have appeared to be ungrateful when I made the constitutional argument against all stages, but I know everyone who has taken an interest in the matter will be most grateful for the offer and I am very glad it is not to wait till the Autumn Session.

Question put, and agreed to.

Clause 2 (Short Title) ordered to stand part of the Bill.

Schedule and Preamble agreed to.

Bill reported, without Amendment: to be read the Third time upon Monday next.

POST OFFICE (PARCELS) BILL.

Order for Second Reading read.

The POSTMASTER-GENERAL (Mr. Kellaway): I beg to move, "That the Bill be now read a Second time."
I think the House is entitled to an explanation why I am introducing the Bill at so late a period in the Session. The remuneration of the railway companies for parcel traffic was regulated under the Post Office (Parcels) Act, 1882, under which the companies were entitled to 55 per cent. of the gross postage receipts on all parcels carried over the whole or any part of the journey by rail. The agreement under that Act was subject to termination after a period of 21 years on 12 months' notice being given on either side. It continued to operate until the war period, when, owing to the abnormal rise in costs, the Post Office, in agreement with the Treasury, raised the remuneration of the railway companies first to 60 per cent. and later to 100 per cent. over the pre-War standard. That arrangement was embodied in the Post Office and Telegraphs Act, 1920. The authority given by that Act lapsed about the middle of August last. We were therefore faced with a new situation and it became necessary to make a fresh agreement with the companies. As the result of prolonged negotiations, the companies have agreed with the Post Office to accept remuneration of 40 per cent. of the parcels rates now prevailing. The short financial effect of that would be that we shall be paying the railway companies, if the House gives me this authority, at 40 per cent. of the present postage, about £2,400,000 a year. At the 55 per cent., on which they were paid before the War, the cost would now be £3,300,000 a year, while at the 100 per cent, which we were paying during the latter part of the War period, the amount would be £2,730,000. So that the present agreement effects a saving of about £900,000 as compared with the 55 per cent. basis of the pre-War period, and £330,000 as compared with the rate the companies were paid during the War. It was necessary to ask the House for this authority, because the agreement has been worked by the companies in anticipation of Parliamentary sanction being given. I think the agreement is the best possible which could be made in the circumstances. It
has meant very hard bargaining indeed, and I ought to recognise that the railway companies have met the Post Office and the taxpayers fairly in the matter.

Mr. ATKEY: It would appear from the statement of the Postmaster-General that a very considerable economy will be effected under the provisions of this Bill. I am wondering whether the concession that has been secured from the railway companies of a reduction from 55 per cent. pre-War to 40 per cent. pre-War is clear of any obligations on the part of the Government which would tie their hands in any way in respect of the transport of mails or parcels by the Postmaster-General on his own account. Is there any consideration to which the Postmaster-General has not referred, which is not disclosed in the Bill, which will be or is likely to be any handicap on his Department in future if he desires to avail himself of forms of transport other than that by rail?

Mr. KELLAWAY: The hon. Member will find that the only Clause which can in any way be said to restrict the freedom of the Post Office is Clause (1, c), in which an undertaking is given that the mails shall not be transferred to the road for the purpose of defeating the agreement; but up to a percentage of 10 per cent. the Post Office is free to make such arrangements where satisfactory trade communication does not exist.

Question put, and agreed to.

Bill read a Second time, and committed to a Standing Committee.

TELEGRAPH [MONEY] BILL.

Not amended (in the Standing Committee,) considered.

Bill to be read the Third time upon Monday next.

REPRESENTATION OF THE PEOPLE (No. 4) BILL.

Order for Second Reading read.

The ATTORNEY - GENERAL (Sir Ernest Pollock): I beg to move, "That the Bill be now read a Second time."
This is a one Clause Bill. In the Act of 1918, Section 34, provision was made to prevent expenditure being incurred at elections, and thus increasing the total expenditure, unless such expenditure was authorised properly by the election agent and brought into the account of the candidate by whose agent it was authorised. It has been found that considerable expenditure has taken place at elections by companies and not by persons. Section 34, which made irregular and unauthorised expenditure a corrupt practice, provided that certain penalties should be imposed upon the persons who committed the offence; but where the offence was committed by a corporation the provision as to imprisonment did not apply. In these circumstances, a considerable amount of expenditure has taken place which all parties in the House consider ought to come within Section 34. The proposal which has been accepted by all parties is that we should adopt the method now applying in a great number of other Acts, and say that where a company engages in these activities the persons who shall be responsible shall be a director or officer of the body corporate, but we give an opportunity, as in other Acts, for proof being put forward that the particular person had no part or lot in incurring the expenditure. The Bill has been accepted in its actual terms by all parties.

Question put, and agreed to.

Bill read a Second time.

Resolved, "That this House will immediately resolve itself into the Committee on the Bill."—[Sir E. Pollock.]

Bill accordingly considered in Committee, and reported, without Amendment: to be read the Third time upon Monday next.

CELLULOID AND CINEMATOGRAPH FILM BILL [Lords.]

As amended (in the Standing Committee,) considered.

CLAUSE 1.—(General Safety Provisions.)

(3) Any person aggrieved by any requirement of a local authority, or the refusal of the local authority to grant any sanction, or by the conditions attached to any such sanction, may, within seven days after being notified of such requirement, refusal or con-
ditions, appeal to a Court of Summary Jurisdiction, provided that he has given not less than twenty-four hours' notice in writing of such appeal to the local authority, and the Court on any such appeal may make such order as appears to the Court to be just, including any order for the payment of costs.

2.0 P.M.

The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Sir John Baird): I beg to move, in Sub-section (3), after the word "appeal" ["appeal to the local authorities"], to insert the words, "and the grounds thereof."
The object of this Amendment is that when an appeal be lodged, a statement shall be made setting forth the grounds on which the appeal is made. It is a very common form in Bills.

Amendment agreed to.

CLAUSE 4.—(Execution of Act by local authorities.)

(2) The expenses incurred by a local authority in the execution of their powers under this Act shall be defrayed in the same manner as expenses incurred in the administration of the Public Health Acts, 1875 to 1908.

Mr. T. THOMSON: I beg to move, at the end of Sub-section (2), to insert a new Sub-section—
(3) The occupier of premises in respect of which a statement is required to be furnished to the local authority shall pay to the local authority when furnishing such statement and on the first day of January of every year thereafter, so long as the premises are used for any purpose to which this Act applies, such fees as the Secretary of State may prescribe.
This Amendment, like the previous one, is put down in the interests of and on behalf of municipal corporations, and provides that instead of the appeal being a charge upon the rates, the local authority may take fees.

Mr. HAYDAY: I beg to second the Amendment.

Sir J. BAIRD: In accepting this Amendment, it is only right to say that it is not anticipated that any additional charge will be thrown upon the local authorities in carrying out the Bill, and certainly no new officers will have to be appointed. It is anticipated that the duties will be carried out by the existing officers. They are additional duties, and we think that in these circumstances a fee should be charged. Therefore, we accept the Amendment.

Amendment agreed to.

Bill to be read the Third time upon Monday next.

EDUCATION (SCOTLAND) (SUPERANNUATION) [ANNUITIES].

Resolution reported,
That it is expedient for the purpose of any Act of the present Session providing for the payment of contributions towards the cost of benefits under the scheme framed and approved in terms of the Education (Scotland) (Superannuation) Act, 1919, and for matters incidental thereto, and for the payment from the Consolidated Fund of deferred annuities in respect of contributions under the Elementary School Teachers (Superannuation) Act, 1898, to authorise the charge on the Consolidated Fund and the growing produce thereof of any deferred annuities payable in respect of Scottish contributions to the deferred annuity fund under the Elementary School Teachers (Superannuation) Act, 1898.

Resolution agreed to.

The remaining Orders were read, and postponed.

ADJOURNMENT.

Resolved, "That this House do now adjourn."—[Lieut.-Colnel Sir J. Gilmour.]

Adjourned accordingly at Six Minutes after Two o'Clock.